Puma Q1 sales up 4.4 percent but profit declines

Sales at Puma were up by 4.4 percent currency-adjusted and over 13.2 percent reported to 821 million euros (923 million dollars), driven by growth across all regions and footwear. Gross profit margin was down owing to foreign currency impact. The company launched Puma Ignite running shoe technology in February.

Commenting on the results and strategy ahead, Bjørn Gulden, Chief Executive Officer of Puma said, “Puma's first quarter sales grew slightly stronger than expected with positive impact from footwear. We will continue our strategy to become the fastest sports brand in the world and will continue to invest in product, marketing, retail and IT to lay the foundation for solid profitable growth in the future."

Sales in the EMEA region rose by 0.2 percent currency-adjusted. Southern European countries developed positively, while the United Kingdom saw a decline due to a softer lifestyle business. The Middle East and Africa regions continued to show a solid performance in most of the countries and across all categories. In the Americas region, sales grew by 5.6 percent currency-adjusted, with both North America and Latin America developing positively. Asia/Pacific sales increased by 10.9 percent currency-adjusted with strong performance in China and India, supported by the improved footwear business.

Footwear sales increased by 7.8 percent currency-adjusted driven by a higher demand for Puma’s running, training & fitness products. Apparel sales increased by 5.7 percent currency-adjusted on the back of a strong demand for Puma’s fundamentals, running, training & fitness and golf products. Accessories sales decreased by 4.6 percent currency-adjusted owing to lower sales of socks and bodywear in the North American market.

Puma’s first quarter retail sales increased by 7.3 percent on a currency-adjusted basis, with comparable sales in full-price stores and outlets slightly up. The company also operated a higher number of stores. Retail sales represented 17.5 percent of total sales compared to 17.1 percent last year. Gross profit margin declined from 48.5 percent to 46.9 percent in the first quarter, solely due to negative currency impacts. The footwear gross profit margin declined to 42.9 percent, apparel decreased to 50.7 percent, and accessories remained at previous year's level of 49.6 percent. In absolute figures, gross profit increased by 9.3 percent in reported terms. PUMA's consolidated net earnings declined by 30.3 percent, as a result, earnings per share decreased from 2.38 euros (2.68 dollars) to 1.66 euros (1.87 dollars)in the first quarter of the year.

In 2015, Puma will continue its strong marketing investments to further enhance and reinforce brand positioning. After the positive sales development in the first quarter 2015, the company continues to expect an increase in the medium single-digit range for full-year currency-adjusted net sales. However, due to currency fluctuations against the US dollar, it foresees a drop in the gross profit margin for the full year in a range of 100 to 150 basis points versus last year.